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The Atlanta Affordable Housing Fund, LP (AAHF), a social impact fund designed to provide low-interest rate financing for affordable housing projects, has raised $2 million from Truist Financial Corporation, according to a press release this week. An additional $2 million in financing from Truist is contingent on the AAHF raising a cumulative $20 million in closed commitments. News of the raised funds arrives as Invest Atlanta has loaned $80,000,000 to developers this week to bring 700 affordable units to the area.
The mission of the fund, which is targeted to raise $25 million, is to deploy low-cost capital to qualified developers and sponsors who are either creating or preserving affordable housing in Atlanta. AAHF has raised funds from foundations, organizations, and individuals. AAHF also recently closed on its second investment, which will enable a local nonprofit to acquire strategic parcels needed for the creation of critically needed affordable housing opportunities for Atlantans.
“We’re excited to develop partnerships with incredible financial institutions like Truist that support our efforts to accelerate the supply of quality affordable housing units in Atlanta,” Ashani O’Mard, AAHF executive director, said in the release. “As the fund continues to gain momentum, we’re looking forward to further growing our partnerships to create long-term social, cultural, and economic change.”
AAHF is led by Atlanta-based real estate professionals including board members Marc Pollack, David Allman, and Egbert Perry. Earlier this month, Sarah Kirsch, executive director of ULI Atlanta, and Ceasar Mitchell Jr., partner at Dentons, were named to AAHF’s Board.
“The pandemic has placed unforeseen challenges on Atlanta’s affordable housing landscape, but continuing to grow the capabilities and effectiveness of our board is an important step in creating impactful, long-term solutions that will make a difference for thousands of local families,” Allman said. “Both Sarah and Ceasar have demonstrated experience in identifying solutions that benefit the economic well-being of individuals and our region, and we’re honored to welcome them to AAHF.”
The fund provides a mechanism for individuals, corporations and foundations to invest in affordable housing in metro Atlanta. Investors will receive a return, though lower than what they would receive in a market-rate real estate investment fund. Fund-raising efforts were launched in January, with the Arthur M. Blank Family Foundation announced as an early investor.
“We believe it’s our obligation to partner with the Atlanta Affordable Housing Fund because it aligns with Truist’s purpose to build better lives and communities, particularly in a city that’s been – and will continue to be – so important to us,” Jenna Kelly, Truist’s North Georgia regional president, said. “We’ve maintained that our commitment to Atlanta will continue to be unwavering, and it’s important we dedicate resources to ensure that Atlantans can meet their housing needs in one of the most expensive cities in the nation.”
Atlanta has emerged as one of the nation’s top five most expensive cities with nearly 50 percent (or 340,000) of households who are cost-burdened and paying more than 30 percent of income toward housing costs, according to the release. Rents escalated by 48 percent between 2011 and 2016, while incomes increased by 10 percent, creating a growing demand for affordable housing stock.
AAHF is aligned with HouseATL, an initiative driven by civic leaders to address the City of Atlanta’s affordable housing shortage. AAHF is also supported by the Atlanta Real Estate Collaborative (AREC), a nonprofit and the creator of Open Doors, which has housed thousands of homeless persons in metro Atlanta.